521 2165 COMMITTEE ON APPROPRIATIONS CLARENCE CANNON, Missouri, Chairman JOHN H. KERR, North Carolina ANTONIO M. FERNANDEZ, New Mexico PRINCE H. PRESTON, JR., Georgia OTTO E. PASSMAN, Louisiana LOUIS C. RABAUT, Michigan DANIEL J. FLOOD, Pennsylvania CHRISTOPHER C. MCGRATH, New York SIDNEY R. YATES, Illinois FOSTER FURCOLO, Massachusetts FRED MARSHALL, Minnesota ALFRED D. SIEMINSKI, New Jersey GEORGE Y. HARVEY, Clerk H.B. DEPARTMENT OF AGRICULTURE APPROPRIATIONS FRIDAY, FEBRUARY 9, 1951. WITNESSES HON. CHARLES F. BRANNAN, SECRETARY OF AGRICULTURE W. CARROLL HUNTER, SOLICITOR, OFFICE OF THE SOLICITOR RALPH S. TRIGG, ADMINISTRATOR, PRODUCTION AND MARKETING T. ROY REID, DIRECTOR OF PERSONNEL, OFFICE OF THE RALPH S. ROBERTS, DIRECTOR OF FINANCE AND BUDGET OFFICER, Mr. WHITTEN. Gentlemen, the committee will be in order. We are indeed glad to have with us our friend and colleague, Joe Bates, who has been a very active and able member of the Committee on Appropriations for a number of years. We welcome him, as an individual, to the committee. We are glad to have his able assistance as we go through these hearings. He has always evidenced a tremendous interest in agricultural problems. He comes from that type of area. We know he will be of real help to us in the work of the committee. Mr. ANDERSEN. I want to join in those remarks to Mr. Bates. I am certainly glad he is on this subcommittee. Mr. HORAN. I want, also, to join in those remarks, Mr. Chairman. We are very glad to have you with us. Mr. STIGLER. May I make it unanimous, Mr. Chairman. Mr. WHITTEN. Mr. Secretary, we are indeed glad to have you with us as well as your associates, Mr. McCormick, the Under Secretary of Agriculture; Mr. Hutchinson, Assistant Secretary of Agriculture; Mr. Hunter, Solicitor; Mr. Wells, Chief of the Bureau of Agricultural Economics; Dr. Cardon, Administrator of Agricultural Research Administration; Mr. Trigg, Administrator, Production and Marketing Administration; and Mr. Reid and Mr. Roberts in their official capac ities. We will be glad to have your general statement. We will try to let you go through this as far as possible without interruption. I know it will be easier on you to proceed on that basis. (1) Part1 82 GENERAL STATEMENT Secretary BRANNAN. We will be happy to proceed in whatever way you wish. I appreciate this opportunity to talk over with you the work of the Department of Agriculture. These annual hearings are of great importance to agriculture, providing as they do both a comprehensive review and a specific plan for all that the department undertakes in agriculture's behalf. Hearings such as this are the harness, so to speak, in which the legislative and executive branches can be hitched together to pull as a team. There are, of course, many other joint and coordinate functions, but none is more important than the program review and planning of the budget-making process. More than ever, these times necessitate realistic appraisals of all our programs and how those programs fit into the pattern of our mobilization needs. We have made such appraisals to the best of our ability in preparing our budget estimates. We believe the proposed budget is a sound one in the light of present circumstances and the over-all fiscal problems confronting the Federal Government as a result of existing international uncertainties. Under more normal conditions, we would regard the proposed budget as less than adequate to meet essential needs. But we are entirely aware of the necessity, as I know you are, to put first things first while providing as well as possible under existing circumstances for a sound future. In other times and under other conditions, we have discussed some of the serious economic problems that confront agriculture, and outlined suggestions for consideration of the Congress in meeting them more adequately than they have been met in the past. It would certainly not be realistic now to think or act in any terms other than the defense emergency that confronts us. And it would be wrong for anyone to assume that we are doing otherwise in the Department of Agriculture. From the time of the Korean outbreak on down to the present, throughout the period of growing awareness of the grave situation our Nation now faces, we have considered and are still considering agriculture's problems only in the light of conditions as they now exist. Whether in peace or in war, the goal of our farm programs is to meet our actual needs. Because of the necessity of keeping the preparedness effort foremost in our minds, it is my intention to discuss our work particularly as it concerns our Nation's defense mobilization. In order to be helpful to you in making your appraisals I have brought together some pertinent facts bearing upon the following important topics: (1) Agriculture's role in defense mobilization; (2) the impact that changing world conditions have already had upon agriculture; (3) the conditions that exist in agriculture today; (4) how our policies and activities are geared to the defense effort; and (5) the further assistance that agriculture may require to fulfill adequately its responsibilities to the Nation during the uncertain period ahead. AGRICULTURE'S ROLE IN DEFENSE MOBILIZATION Ever since the Korean outbreak, American agriculture's productive ability has assumed added significance from the viewpoint of agriculture's basic and vital role in the Nation's defense effort. Our security is in strength-economic as well as military. We know we must keep our economy strong to maintain our military strength. And we know from experience that we cannot long maintain a strong economy without strength and stability in agriculture. Agriculture, therefore, is a vital part of our potential national strength and must be so regarded. Preparedness means more than just tanks and planes and guns. It means adequate supplies of food and fiber as well. Agriculture's present mobilization challenge is an urgent call for abundant production, for both the physical and economic needs of the Nation. We must strive to produce enough of the right kinds of food and other farm products to fill every need at reasonable prices. IMPACT OF CHANGING WORLD CONDITIONS ON AGRICULTURE Changing world conditions have already been felt sharply in agriculture, causing an abrupt about face in some agricultural trends during 1950 and greatly changing the outlook for the year ahead. These rapidly changing conditions, and the inflationary pressures accompanying them, emphasize once more the importance of our vast farm productivity to the Nation's stability and security. They emphasize, too, the importance of national policies strengthening the position of agriculture in our economy, and strenghtening its ability to adjust itself rapidly to the changing needs of that economy. American farmers went into 1950 with growing concern over possible surpluses of some farm commodities, because effective demand was failing to keep abreast of agriculture's ability to produce. They came out of the year concerned, instead, with producing in sufficient abundance to meet a rising demand. The impact of the Korean outbreak on the Nation's economy, presaging heavy defense expenditures, high employment levels, and increased consumer incomes, halted and reversed the downward trend in farm prices and farm income in midyear. However, the greatly improved demand and better prices during the last half of 1950 were only sufficient to about counterbalance the lower demand and prices of the first half. Gross farm income in 1950 was almost the same as in 1949, while rising farm expenses meant that net realized farm income was still below the 1949 net income, marking the third consecutive year of decline. More food was available for distribution in the past year than in the two preceding years. Food disappearance was more than a third larger than in the prewar period, although slightly below the 1944-47 average. Per capita consumption of meat, poultry, and eggs, fluid milk and cream, fresh vegetables, and fats and oils all registered small increases during the year-a reflection of high-level civilian employment and income. We expect, of course, that employment and income will reach higher levels in the present year. We know from experience that people consume more food in periods of full employment and high purchasing power such as the defense effort will create, and we know that the pattern of demand changes. We must set our sights high to meet this increased and still changing demand. CONDITIONS IN AGRICULTURE TODAY American farmers are in a better position to respond to the demands of mobilization than they were at the outbreak of World War II. Our productive power is the greatest in history. We are already geared to produce around 40 percent more than the average for the years just preceding World War II. Assuming a fair break from the weather, and adequate materials for production, I believe American farmers can boost their production a good deal higher. Farmers have been plowing back into their business the gains of relative prosperity in recent years, making farming more highly efficient than ever before. Farm output per man-hour reached an all-time high during 1950, and is now about twice what it was 40 years ago. We have more farm machinery than ever before, and more efficient farm machinery. There are over twice as many tractors on farms now as there were at the time of Pearl Harbor. Two and a half times as many farmers now as prior to World War II are in a position to use electricity for saving manpower and increasing production efficiency. Inventory volume of all farm power and machinery, measured in terms of 1935-39 dollars, is at a record level. Research has been steadily producing better plant varieties, new hybrid seeds, improved bug and weed killers, and more efficient uses of fertilizer. Our 1950 crop production was the third largest on record, exceeding the average of the previous 8 years, which was the most productive period in American agricultural history. Farmers achieved this high production despite sharp reductions in acreage of several major crops and a growing season that had many unfavorable aspects. Production of food alone in 1950 was slightly larger than in 1949, and nearly equal to the highest marks of record. Farm production of nonfood commodities, on the other hand, was 12 percent lower than in 1949, mainly because of the smaller cotton crop. Only 9.9 million bales of cotton was produced, the combined result of a sharp reduction in harvested acreage plus a less-than-average yield per acre. Increases in livestock production largely offset declines in crop. output to keep total farm production close to record levels. Our grain production was exceeded only three times before in history. Food grains were down some from 1949, but still larger than in any year before 1944. The wheat crop of 1,C27,000,000 bushels was just about average. Farm stocks of wheat on January 1 were below the 1940-49 average, but slightly larger than a year ago. Feed grain production was the third largest in history, exceeded only by the 1949 crop and the all-time high mark of 1948. Included in the total were relatively large out-turns of 3,131,000,000 bushels of corn and 1,465,000,000 bushels of oats. With our reserves, the total supply of livestock feed for the coming year will be larger, in bushels and per animal, than when we entered World War II-and larger than the wartime peak in 1944. Stocks of |